Thursday, July 19, 2007

Trust Issues With CellSwapper

CellSwapper is a new service (http://www.cellswapper.com) that allows one to get out of a cell phone contract they are stuck with, without having to pay the termination fee (only paying a much smaller service fee). This is a cool service and will certainly be found useful by many users stuck in their long contracts who are frustrated due to poor reception, etc. The owner of the contract (the "seller") gets out of the contract by transferring it to someone who wants a new contract (the "buyer"), the transfer being facilitated by CellSwapper. The seller gains by not having to pay the huge termination fee, and the buyer gains by not having to pay the activation fee on a new contract. However, I see one potential problem with the transfer process which can be exploited by malicious users.

This is how the contract transfer happens:
  1. Seller posts his contract details on CellSwapper.
  2. Buyer contacts seller through CellSwapper
  3. Seller pays service fee to CellSwapper ($14-$19) to get buyer details.
  4. Seller transfers contract to buyer through the cell phone service provider.
  5. Seller ships the SIM card and/or phone to the buyer.
There are issues with this scheme mentioned on the CellSwapper website like if step 4 fails due to the buyer failing credit check, the seller loses his service fee, but I don't really consider it "malicious" on the buyer's part as he didn't gain anything. However, the seller can behave maliciously if he transfers the contract to the buyer in step 4 but doesn't immediately send the SIM card to the buyer. He could abuse the minutes on the contract before dispatching the SIM/phone and not have to worry about it since the financial responsibility is transferred already. Of course, this is possible only if step 4 happens without the seller and the buyer physically meeting each other, say doing the transfer of contract on the phone.

I don't see how the buyer can possibly protect himself from this unless the contract transfer process requires a re-activation by the buyer in which case the seller will not be able to use minutes on the contract anymore once the transfer is over. Although I haven't ever tried it myself, this kind of arrangement looks highly unlikely to me. So in the absence of this scheme, the buyer can only trust that the seller doesn't abuse the contract in this way.

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